Exhibit 10.14
PRIVILEGED AND CONFIDENTIAL
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DRAFT May 4, 2001 v1.3
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT, effective as of July 1, 2001 (the
"Agreement"), by and among PC-EPhone, Inc., a Nevada corporation (the
"Company"), and Xxxxx Xxxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive as Chief
Executive Officer of the Company, and the Executive desires to be employed by
the Company as its Chief Executive Officer, on the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the premises and the mutual
agreements made herein, the Company and the Executive agree as follows:
1. Employment; Duties. The Company shall employ the Executive
as Chief Executive Officer of the Company, and the Executive shall serve the
Company in such position for the "Employment Period" as defined in Section 2.
The Executive agrees that during the term of his employment hereunder, he shall
devote his full working time, attention, knowledge and experience and give his
best effort, skill and abilities, exclusively to promote the business and
interests of the Company. The precise duties, responsibilities and authority of
the Executive may be expanded, limited or modified, from time to time, at the
discretion of the Board of Directors of the Company or a committee of the Board
to which the Board has delegated such authority (collectively, the "Board"). In
connection with this responsibility, the Executive must submit monthly written
progress reports to the Board of Directors of the Company. Except as expressly
authorized by resolution of the Board during the Employment Period, the
Executive shall render his business services solely in the performance of his
duties hereunder. The Executive agrees to faithfully and diligently perform such
duties as may from time to time be assigned to the Executive by the Board.
2. Employment Period. This Agreement shall have an initial
term of two years commencing on the date first written above and ending on the
second anniversary thereof (the "Initial Period"), unless sooner terminated in
accordance with the provisions of Section 7 or Section 8. On the expiration of
such Initial Period, this Agreement shall automatically renew and continue to
remain in effect for successive two (2) year periods, until terminated in
accordance with the provisions of Section 7 or Section 8, unless either party
provides the other party of notice of non-renewal within 30 days of the
anniversary of the date of execution of this Agreement. Each effective period of
this Agreement is referred to herein as the "Employment Period."
3. Compensation and Benefits.
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(a) Base Compensation. The Executive shall be paid a monthly
base salary at the rate of $34,200 per month, less statutory deductions (the
"Base Salary"). The Base Salary shall be payable each month in accordance with
the Company's regular payroll practices, as the same may be modified from time
to time. The Company and the Executive agree that it shall conduct a performance
review for the purpose of determining an appropriate change to the Base Salary
that shall be effective on the thirteenth month.
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(b) Expense Reimbursement. The Executive shall be entitled to
reimbursement of reasonable out-of-pocket expenses incurred in connection with
travel and entertainment related to the Company's business and affairs upon
receipt of itemized vouchers approved in accordance with Company policy as in
effect from time to time.
(c) Benefits. The Executive shall be eligible for
participation in Company benefits that may be available to employees as in
effect from time-to-time. Whether or not provided as employee benefits, Company
shall, at a cost of not more than $1,200 per month, provide Executive with a
health, dental, disability, and life insurance polices selected by the
Executive. Both the disability and term life insurance policies shall be owned
by Executive and paid for by the Company. The life insurance policy shall be
purchased with a face value of five (5) times Base Compensation salary. Where
the Executive cannot qualify for a particular insurance policy, the Company
shall be relieved of its duties under this provision, as to that particular
policy.
(d) Equity Compensation. The Executive shall receive
options for the purchase of shares of Company common stock in accordance with
the terms and conditions of the option agreement attached hereto as
Exhibit A.
(e) Vacation. The Executive shall be entitled to four weeks
paid vacation per calendar year, pro-rated with respect to the portion of the
year in which employment commenced with the Company. Any accrued but untaken
vacation may be carried over and used up to six months after the year in which
accrued, but not thereafter. No compensation shall be paid for accrued but
untaken vacation.
(f) Signing Bonus. The Executive shall be entitled to a
signing bonus comprised of the grant of stock option exercisable for 65,000
shares of Common Stock as set forth on Exhibit A.
4. Trade Secrets. The Executive recognizes that it is in the
Company's legitimate business interest to restrict his disclosure or use of
Trade Secrets and Confidential Information relating to the Company or its
affiliates for any purpose other than in connection with his performance of his
duties to the Company, and to limit any potential appropriation of such Trade
Secrets and Confidential Information by the Executive. The Executive therefore
agrees that all Trade Secrets and Confidential Information relating to the
Company and its affiliates heretofore or in the future obtained by the Executive
shall be considered confidential and the proprietary information of the Company
for purposes of this Agreement. During or subsequent to the Employment Period,
the Executive shall not use or disclose, or authorize any other person or entity
to use or disclose, any Trade Secrets or Confidential Information, other than as
necessary to further the business objectives of the Company in accordance with
the terms of his employment hereunder. The terms "Trade Secrets" and
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"Confidential Information" include, by way of example and without limitation,
matters of a technical nature, such as scientific, trade and engineering
secrets, "know-how", formulas, secret processes, drawings, works of authorship,
machines, inventions, computer programs (including documentation of such
programs), services, materials, patent applications, new product plans, other
plans, technical information, technical improvements, manufacturing techniques,
specifications, ideas, manufacturing and test data, progress reports and
research projects, and matters of a business nature, such as product pricing,
distribution, sub-distribution, business plans, prospects, financial
information, proprietary information about costs, profits, markets, sales, lists
of customers and suppliers, procurement and promotional information, credit and
financial data, plans for future development, information relating to the
Company's or its affiliates' management, operation and planning, and other
information of a similar nature to the extent not available to the public, of or
relating to the Company or its affiliates, and their business, customers and
suppliers, the disclosure of which to competitors of the Company or its
affiliates or others would cause the Company to suffer substantial and
irreparable damage. After expiration or termination of the Executive's
employment with the Company for any reason, the Executive shall not use or
disclose Trade Secrets or other Confidential Information for a period of five
(5) years except with the express written permission by resolution of the Board
of Directors.
5. Return of Documents and Property. Upon the expiration or
termination of the Executive's employment with the Company, or at any time upon
the request of the Company, the Executive (or his heirs or personal
representatives) shall deliver to the Company (a) all documents and materials
(including, without limitation, computer files) containing Trade Secrets and
Confidential Information relating to the Company's business and affairs, and (b)
all documents, materials, equipment and other property (including, without
limitation, computer files, computer programs, computer operating systems,
computers, printers, scanners, pagers, telephones, credit cards and ID cards)
belonging to the Company, which in either case are in the possession or under
the control of the Executive (or his heirs or personal representatives).
6. Discoveries and Works. All Discoveries and Works made or
conceived by the Executive during his employment by the Company, solely, jointly
or with others, that relate to the Company's present or anticipated activities,
or are used or useable by the Company shall be owned by the Company. The term
"Discoveries and Works" includes, by way of example but without limitation,
Trade Secrets and other Confidential Information, patents and patent
applications, service marks, and service xxxx registrations and applications,
trade names, copyrights and copyright registrations and applications. The
Executive shall (a) promptly notify, make full disclosure to, and execute and
deliver any documents requested by the Company, as the case may be, to evidence
or better assure title to Discoveries and Works in the Company, as so requested,
(b) renounce any and all claims, including but not limited to claims of
ownership and royalty, with respect to all Discoveries and Works and all other
property owned or licensed by the Company, (c) assist the Company in obtaining
or maintaining for itself at its own expense United States and foreign patents,
copyrights, trade secret protection or other protection of any and all
Discoveries and Works, and (d) promptly execute, whether during his employment
with the Company or thereafter, all applications or other endorsements necessary
or appropriate to maintain patents and other rights for the Company and to
protect the title of the Company thereto, including but not limited to
assignments of such patents and other rights. Any Discoveries and Works which,
within one year after the expiration or termination of the Executive's
employment with the Company, are made, disclosed, reduced to tangible or written
form or description, or are reduced to practice by the Executive and which
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pertain to the business carried on or products or services being sold or
delivered by the Company at the time of such termination shall, as between the
Executive and, the Company, be presumed to have been made during the Executive's
employment by the Company. The Executive acknowledges that all Discoveries and
Works shall be deemed "works made for hire" under the Copyright Act of 1976, as
amended 17 U.S.C. Sect. 101.
7. Termination.
(a) Manner of Termination. The Company and the Executive may
terminate this Agreement, with or without cause, only in accordance with the
provisions of this Section 7.
(b) Termination Without Cause. During the Employment Period,
if the Company terminates this Agreement other than for cause the Company shall
pay Executive a termination fee as follows: (i) if termination of Executive
without cause occurs during the first 12 months of the Employment Period, the
Executive shall receive a lump sum payment equivalent to the next six (6) months
Base Compensation in effect as of the effective date of such termination plus
reimbursement of any and all expenses incurred by Executive as of the date of
notice of such termination, or (ii) if termination of Executive without cause
occurs after the first 12 months of the Employment Period, the Executive shall
receive a lump sum payment equivalent to the next twelve (12) months Base
Compensation in effect at the date of notice of such termination, reimbursement
of any and all expenses incurred by Executive as of the date of notice of such
termination, plus payment of any and all bonus payments payable as of such date,
and, subject to the terms and conditions of the option agreement attached hereto
as Exhibit A, all of such equity instruments that would otherwise vest and
become exercisable within the twelve (12) months immediately following the date
of notice of termination, shall as of such date fully and irrevocably vest and
become exercisable and/or non-forfeitable by the Executive until the first
anniversary of the termination of the Executive's/Optionee's employment (but in
no event beyond the expiration of the stated term of such instrument). Any such
payment hereunder and vesting of such equity instruments shall completely and
fully discharge any and all obligations and liabilities of the Company to the
Executive with respect to this Agreement.
(c) Termination for Cause by the Company. The Company may
terminate this Agreement for cause at any time during the Employment Period
effective immediately upon giving written notice of termination to the
Executive. For purposes of this Agreement, "cause" shall mean, with respect to
the Executive, (i) any act of fraud or dishonesty, willful misconduct or gross
negligence in connection with the Executive's duties, (ii) a breach by the
Executive of any provision hereof or of any contractual or legal fiduciary duty
to the Company (including, but not limited to, the unauthorized disclosure of
Trade Secrets or other Confidential Information, non-compliance with the
policies, guidelines and procedures of the Company or engaging during his
employment in any other employment or business without the express written
approval of the Company's Board of Directors), or (iii) the conviction of the
Executive for the commission of a felony, whether or not such alleged felony was
committed in connection with the Company's business or (iv) the commencement of
any bankruptcy proceedings for personal mismanagement, the appointment of a
trustee or receiver for the Executive due to personal mismanagement or the
general assignment of the Executive's assets to his creditors due to personal
mismanagement.
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(d) Termination for Cause by Executive. The Executive may
terminate this Agreement for cause at any time during the Employment Period
effective immediately upon giving written notice of termination to the Company.
For purposes of this Agreement, with respect to the Company, "cause" shall mean
the failure to pay any amounts due Executive hereunder (and not disputed in good
faith by the Company) within two months after their due date.
(e) Effect of Termination. Except as provided in Section 8
below, in the event this Agreement is terminated, the Executive's rights and the
Company's obligations hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive Base Salary,
bonus and all other compensation, expense allowance or benefits provided for in
this Agreement, and the Executive shall not be entitled to any further
compensation, expense allowance, benefits, or severance compensation of any
kind, and shall have no further right or claim to any compensation, benefits or
severance compensation under this Agreement or otherwise against the Company or
its subsidiaries and affiliates, from and after the date of such termination,
except as provided for herein.
(f) Release. As a condition to the payments, rights and
entitlements described in Section 7 hereof, if any, the Executive shall have
executed and delivered to the Company a release in the form attached hereto as
Exhibit B (the "Release"), as such Release may be amended by the Company and
agreed to by the Executive from time to time, and such Release shall have become
irrevocable.
(g) Survival. Any termination under this Section 7 is
subject to the provisions of Sections 18 and 20 hereof.
(h) Relinquishment of Authority. Notwithstanding anything to
the contrary set forth herein, upon written notice to the Executive, the Company
may immediately relieve the Executive of all his duties and responsibilities
hereunder and may relieve the Executive of authority to act on behalf of, or
legally bind, the Company. Where such written notice to the Executive does not
include a notice of termination for cause, the Company's obligation hereunder
shall continue regardless of the fact that Executive has been relieved of his
duties and responsibilities and cannot perform his obligations under this
Agreement, including all obligations of Company to compensate Executive pursuant
to Section 3, except as such obligations shall otherwise be terminated pursuant
to this Section 7.
(j) Change in Control. For purposes of this Agreement "Change
in Control" means (i) the acquisition (by means of purchase, merger or
otherwise) by any person or any two or more persons acting as a partnership,
syndicate or other group for the purpose of acquiring, holding or disposing of
such securities of beneficial ownership of fifty-one percent (51%) or more of
the sum of the amount of the shares of Company common stock (the "Shares") then
outstanding, plus any Shares which may be issued pursuant to the conversion or
exercise of all outstanding options, rights or warrants; or (ii) the sale of all
or substantially all of the assets of the Company. Notwithstanding anything to
the contrary, for purposes of this Section, a person shall not be deemed to have
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made an acquisition of beneficial ownership of Shares if such person: (a)
acquires beneficial ownership of such Shares directly from the Company; (b)
assumes beneficial ownership of more than the permitted percentage of Shares
solely as a result of the acquisition of beneficial ownership of Shares by the
Company which, by reducing the proportional beneficial ownership of Shares by
other security holders, increases the proportional beneficial ownership of
Shares by such person; or (c) is (1) the Company or any corporation or other
person of which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by the Company (a "Controlled
Entity") or is owned directly or indirectly by the stockholders of the Company
in the same proportion as their beneficial ownership of Shares or (2) a trustee
or other fiduciary holding securities under one or more employee benefit plans
or arrangements (or any trust forming a part thereof) maintained by the Company
or any Controlled Entity.
(k) Change in Control Termination. Notwithstanding any other
provision in this Agreement, in the event the Executive's employment with the
Company is terminated by the Company following a Change in Control, the
Executive shall receive within ten (10) calendar days of notice of such
termination, in lieu of the payment specified in Section 7(b) above, a lump sum
payment equivalent to the next twenty-four (24) months salary, plus
reimbursement of any and all expenses incurred by Executive as of such date,
plus payment in full of any and all prospective annual bonus payments with
respect to the next succeeding twenty-four months, and, subject to the terms and
conditions of the option agreement attached hereto as Exhibit A, all of such
equity instruments granted therein, including all "additional options," as well
as any other options authorized, from time to time, by the Board of Directors,
shall fully and irrevocably vest and become exercisable and/or non-forfeitable
by the Executive until the first anniversary of the termination of the
Optionee's employment (but in no event beyond the expiration of the stated term
of such instrument), and all of such payments and vesting of equity instruments
shall completely and fully discharge any and all obligations and liabilities of
the Company to the Executive with respect to this Agreement.
8. Disability; Death.
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(a) If, prior to the expiration of the Employment Period, the
Executive shall be unable to perform his duties hereunder by reason of physical
or mental disability for at least ninety (90) consecutive calendar days (the
"Disability Period"), the Company shall have the right to terminate this
Agreement on the ninety-first (91st) day and the remainder of the Employment
Period by giving written notice to the Executive to that effect. Immediately
upon the giving of such notice, the Employment Period shall terminate. For
purposes of clarity, the Company shall continue to pay Executive any and all
salary, benefits and other compensation as specified in Section 3 during the
Disability Period.
(b) All compensation and benefits provided for in Section 3 of
this Agreement shall cease upon termination pursuant to Section 8(a) except
that, subject to the terms and conditions of the option agreement attached
hereto as Exhibit A, all of such equity instruments that would otherwise vest
and become exercisable up to the effective date of such termination, shall as of
such date fully and irrevocably vest and become exercisable and/or
non-forfeitable by the Executive until the first anniversary of the termination
of the Executive's/Optionee's employment (but in no event beyond the expiration
of the stated term of such instrument), and all of such payments and vesting of
such equity instruments shall completely and fully discharge any and all
obligations and liabilities of the Company to the Executive with respect to this
Agreement.
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(c) In the event of a dispute as to whether the Executive is
disabled within the meaning of Section 8(a), either party may from time to time
request a medical examination of the Executive by a doctor appointed by the
Chief of Staff of a hospital selected by mutual agreement of the parties, or as
the parties may otherwise agree, and the written medical opinion of such doctor
shall be conclusive and binding upon the parties as to whether the Executive has
become disabled and the date when such disability arose. The cost of any such
medical examination shall be borne by the requesting party.
(d) If, prior to the expiration of the Employment Period or
the termination of this Agreement, the Executive shall die, the Executive's
estate shall be paid his Base Salary and a pro rated portion of his bonus (if
any) and other compensation or expense allowance then due. Any bonus payable
pursuant to this Section 8(c) shall be payable on the first bonus payment date
following such termination. Except as otherwise provided in this Section 8(d),
upon the death of the Executive, the Employment Period shall terminate without
further notice and the Company shall have no further obligations hereunder,
including, without limitation, obligations with respect to compensation, expense
allowance and benefits provided for in Section 3 of this Agreement, other than
as set forth in the immediately preceding sentence.
(e) Any termination under this Section 8 is subject to the
provisions of Section 18 hereof.
9. No Conflicts. The Executive has represented and hereby
represents to the Company and its affiliates that the execution, delivery and
performance by the Executive of this Agreement do not conflict with or result in
a violation or breach of, or constitute (with or without notice or lapse of time
or both) a default under any contract, agreement or understanding, whether oral
or written, to which the Executive is a party or of which the Executive is or
should be aware and that there are no restrictions, covenants, agreements or
limitations on his right or ability to enter into and perform the terms of this
Agreement, and agrees to indemnify and save the Company and its affiliates
harmless from any liability, cost or expense, including attorney's fees, based
upon or arising out of any such restrictions, covenants, agreements, or
limitations that may be found to exist.
For purposes of this Agreement, "affiliate" shall include any
person or entity directly or indirectly controlled by or controlling the
Company.
10. Non-competition. During the Employment Period and for an
additional period of six (6) months following the date of such termination or
the expiration of this Agreement, (the "Restricted Period"), the Executive will
not (except as an officer, director, stockholder, employee, agent or consultant
of the Company or any affiliate thereof) directly or indirectly, own, manage,
operate, join, or have a financial interest in, control or participate in the
ownership, management, operation or control of, or be employed as an employee,
agent or consultant, or in any other individual or representative capacity
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whatsoever, or use or permit his name to be used in connection with, or be
otherwise connected in any manner with (i) any business or enterprise engaged
within any portion of the United States or Canada (whether or not such business
is physically located within the United States or Canada) in the design,
development, manufacture, distribution, lease, rental or sale of any products,
or the provision of any services, which the Company or any of its affiliates was
designing, developing, manufacturing, distributing, leasing, renting, selling or
providing at any time up to and including the date of termination of this
Agreement or (ii) any business which is competitive with the business carried on
or planned by the Company or any of its affiliates at any time during the period
of the Executive's employment by the Company, unless the Executive shall have
obtained the prior written consent of the Board, provided that the foregoing
restriction shall not be construed as prohibiting the ownership by the Executive
of not more than one percent (1%) of any class of securities of any corporation
which is engaged in any of the foregoing businesses, having a class of
securities registered pursuant to the Securities Exchange Act of 1934, which
securities are publicly owned and regularly traded on any national exchange or
in the over-the-counter market; provided further, that such ownership represents
a passive investment and that neither the Executive nor any group of persons
including the Executive in any way, either directly or indirectly, manages or
exercises control of any such corporation, guarantees any of its financial
obligations, otherwise takes part in its business other than exercising his
rights as a shareholder, or seeks to do any of the foregoing. Each of the
parties expressly acknowledges and understands that twenty five percent (25%) of
the incremental compensation to be paid to Executive hereunder has been
specifically negotiated and agreed to be paid as special consideration such that
the foregoing non-competition provisions of this Section 10 shall be fully
binding from inception of this Agreement and thereafter as provided above, and
Executive expressly waives any and all judicial, arbitral, administrative and/or
any other remedy to rescind, void, negate or otherwise render this Section 10
inoperative on the basis of any equitable or legal grounds whatsoever and
Executive shall fully indemnify and hold harmless the Company if Executive
breaches or brings any challenge to this Section 10, including, without
limitation, reimbursement of Company's attorneys fees and reasonable costs and
expenses incurred in connection therewith.
11. Non-Solicitation. During the Restricted Period, the
Executive, directly or indirectly, whether for his account or for the account of
any other individual or entity, shall not solicit or canvas the trade, business
or patronage of, or sell to, any individuals or entities that were either
customers of the Company during the time the Executive was employed by the
Company, or prospective customers with respect to whom a sales effort,
presentation or proposal was made by the Company or its affiliates, during the
one year period prior to the termination or expiration of this Agreement, as the
case may be. The Executive further agrees that during the Restricted Period, he
shall not, directly or indirectly, (i) solicit, induce, enter into any agreement
with, or attempt to influence any individual who was an employee or consultant
of the Company at any time during the time the Executive was employed by the
Company, to terminate his or her employment relationship with the Company or to
become employed by the Executive or any individual or entity by which the
Executive is employed or (ii) interfere in any other way with the employment, or
other relationship, of any employee or consultant of the Company or its
affiliates.
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12. Enforcement. The Executive agrees that any breach of the
provisions of Sections 4, 5, 6, 10 and 11 hereof would cause substantial and
irreparable harm, not readily ascertainable or compensable in terms of money, to
the Company for which remedies at law would be inadequate and that, in addition
to any other remedy to which the Company may be entitled at law or in equity,
the Company shall be entitled to temporary, preliminary and other injunctive
relief in the event the Executive violates or threatens to violate the
provisions of Sections 4, 5, 6, 10 or 11 hereof, as well as damages, including,
without limitation consequential damages, and an equitable accounting of all
earnings, profits and benefits arising from such violation, in each case without
the need to post any security or bond. Nothing herein contained shall be
construed as prohibiting the Company from pursuing, in addition, any other
remedies available to the Company for such breach or threatened breach. A waiver
by the Company of any breach of any provision hereof shall not operate or be
construed as a waiver of a breach of any other provision of this Agreement or of
any subsequent breach by the Executive.
13. Determinations by the Company. All determinations and
calculations with respect to this Agreement shall be made by the Board or any
committee thereof to which the Board has delegated such authority in accordance
with applicable law, the certificate of incorporation and by-laws of the
Company, which if reasonable, shall be final, conclusive and binding on all
persons, including the Executive and the personal representative of his estate.
14. Successors and Assigns. This Agreement shall inure to the
benefit of and shall be binding upon (i) the Company, its successors and
assigns, and any company with which the Company may merge or consolidate or to
which the Company may sell substantially all of its assets, and (ii) Executive
and his executors, administrators, heirs and legal representatives. Since the
Executive's services are personal and unique in nature, the Executive may not
transfer, sell or otherwise assign his rights, obligations or benefits under
this Agreement.
15. Notices. Any notice required or permitted under this
Agreement shall be deemed to have been effectively made or given if in writing
and personally delivered, mailed properly addressed in a sealed envelope,
postage prepaid by certified or registered mail, delivered by a reputable
overnight delivery service or sent by facsimile. Unless otherwise changed by
notice, notice shall be properly addressed to the Executive if addressed to:
Xxxxx X. Xxxxxxx, Esq.
00000 Xxxxxx Xxx Xxxxx
Xxx Xxxxx, XX 00000
000-000-0000
with a Copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Preovolos & Associates, Inc.
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
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and properly addressed to the Company if addressed to:
PC-EPhone, Inc.
Attention: Board of Directors
#1388, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX, Xxxxxx X0X 0X0
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Wuersch & Xxxxxx LLP
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 212-509-9559
Attention: Xxxxxx X. Xxxxxx, Esq.
16. Severability. It is expressly understood and agreed that
although the Company and the Executive consider the restrictions contained in
this Agreement to be reasonable and necessary for the purpose of preserving the
goodwill, proprietary rights and going concern value of the Company, if a final
judicial determination is made by a court having jurisdiction that any
restriction contained in this Agreement is invalid, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such other extent as such court may
judicially determine or indicate to be reasonable. Alternatively, if the court
referred to above finds that any restriction contained in this Agreement or any
remedy provided herein is unenforceable, and such restriction or remedy cannot
be amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained therein or the
availability of any other remedy. The provisions of this Agreement shall in no
respect limit or otherwise affect the Executive's obligations under other
agreements with the Company.
17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Effects of Termination. Notwithstanding anything to the
contrary contained herein, if this Agreement is terminated pursuant to Section 7
or Section 8 or expires by its terms, the provisions of Sections 4, 5, 6, 10,
11, 12, 13, 14, 15, 16, 19, 20 and this Section 18 shall continue in full force
and effect.
19. Miscellaneous. This Agreement constitutes the entire
agreement, and supersedes all prior agreements, of the parties hereto relating
to the subject matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein. This
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Agreement cannot be modified, altered or amended except by a writing signed by
all the parties. No waiver by either party of any provision or condition of this
Agreement at any time shall be deemed a waiver of such provision or condition at
any prior or subsequent time or of any other provision or condition at the same
or any prior or subsequent time. Notwithstanding anything to the contrary in
this Agreement with respect to any provision herein governing Executive's
exercise of options following termination from employment with the Company, if
during the Employment Period any other employee of the Company is granted an
option exercisable for a period of more than one year following their respective
termination of employment by the Company, then the period of exercisability
following termination by the Company for any and all options then held by
Executive shall be extended to equal the period of time that such other
employee's options remain exercisable beyond their respective termination,
provided, however, that all such options of Executive shall otherwise remain
subject to the terms and conditions of this Agreement.
20. Governing Law; Arbitration.
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(a) This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.
(b) Arbitration. To the fullest extent permitted by law, all
disputes between the Company and Executive relating in any manner whatsoever to
the execution, or fulfillment of this Agreement and all disputes arising under
this Agreement, ("Arbitrable Claims") shall be resolved by arbitration.
Arbitrable Claims shall include, but are not limited to, contract (express or
implied) and tort claims of all kinds, as well as all claims based on any
federal, state, or local law, statute, or regulation, excepting only claims
under applicable workers' compensation law and unemployment insurance claims. By
way of example and not in limitation of the foregoing, Arbitrable Claims shall
include (to the fullest extent permitted by law) any claims arising under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, and the California Fair Employment and
Housing Act, as well as any claims asserting wrongful termination, harassment,
breach of contract, breach of the covenant of good faith and fair dealing,
negligent or intentional infliction of emotional distress, negligent or
intentional misrepresentation, negligent or intentional interference with
contract or prospective economic advantage, defamation, invasion of privacy, and
claims related to disability.
(c) Procedure. Arbitration of Arbitrable Claims shall be in
accordance with the American Arbitration Association (AAA), as augmented in this
Agreement. Arbitration shall be initiated as provided by the AAA Rules, although
the written notice to the other party initiating arbitration shall also include
a statement of the claim(s) asserted and the facts upon which the claim(s) are
based. Arbitration shall be final and binding upon the parties and shall be the
exclusive remedy for all Arbitrable Claims (subject to any internal procedures
required above). Either party may bring an action in court to compel arbitration
under this Agreement and to enforce an arbitration award. Otherwise, neither
party shall initiate or prosecute any lawsuit or administrative action in any
way related to any Arbitrable Claim. Notwithstanding the foregoing, either party
may, at its option, seek injunctive relief pursuant to section 1281.8 of the
11
California Code of Civil Procedure. All arbitration hearings under this
Agreement shall be conducted in San Francisco. THE PARTIES HEREBY WAIVE ANY
RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING
WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE,
VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.
(d) Arbitrator Selection and Authority. All disputes involving
Arbitrable Claims shall be decided by a single arbitrator in San Francisco,
California. The arbitrator shall be selected by mutual agreement of the parties
within thirty (30) days of the effective date of the notice initiating the
arbitration. If the parties cannot agree on an arbitrator, then the complaining
party shall notify the AAA and request selection of an arbitrator in accordance
with the AAA Rules. The arbitrator shall have only such authority to award
equitable relief, damages, costs, and fees as a court would have for the
particular claim(s) asserted. The fees of the arbitrator shall be split between
both parties equally. If the allocation of responsibility for payment of the
arbitrator's fees would render the obligation to arbitrate unenforceable, the
parties authorize the arbitrator to modify the allocation as necessary to
preserve enforceability. The arbitrator shall have exclusive authority to
resolve all Arbitrable Claims, including, but not limited to, whether any
particular claim is arbitrable and whether all or any part of this Agreement is
void or unenforceable.
(e) Attorneys' Fees. If Company or Executive brings any legal
action or seeks arbitration regarding any provision of this agreement, the
prevailing party in the litigation or arbitration shall be entitled to recover
reasonable attorneys' fees from the other party, in addition to any other relief
that may be granted. Company and Executive were each represented by an attorney
in the negotiation and execution of the agreement or elected to represent
themselves. All parties have had an opportunity to review this document with an
attorney.
[signature page to follow]
12
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day of , 2001.
----- ------------
PC-EPHONE, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------- --------------------
XXXXX X. XXXXXXX
Name:
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Title:
----------------------------------------------
13
PRIVILEGED AND CONFIDENTIAL
DRAFT May 4, 2001 v1.3
Exhibit A
[Revised]
[Option]
Number of options: 485,000
Option exercise price: _______
Vesting schedule: 65,000 at time of commencement of
employment; 35,000 every 3 months thereafter. Full
vesting in 3 years.
Additional options, of 3% of all new common share issuances, shall be granted,
as the number of outstanding common shares of the Company increases, to a
maximum of 720,000 options. The exercise price of such options shall be set at
the fair market value of the Company's common shares at the time of the grant by
the Board of Directors.
14
Exhibit B
[Form of Release]
In connection with the Employment Agreement, effective as of July 1,
2001 (the "Employment Agreement"), by and among PC-EPhone, Inc., a Nevada
corporation (the "Company"), and Xxxxx Xxxxxxx (the "Executive"), and in
consideration for the separation consideration provided in Section 7 in the
Employment Agreement, from and effective as of the date of this General Release,
except as otherwise provided herein, Executive does hereby release, remise,
acquit and forever discharge the Company and its present and former officers,
directors, executives, agents, attorneys, employees, affiliated companies,
divisions, subsidiaries, successors, predecessors and assigns (collectively, the
"Released Parties"), of and from any and all claims, actions, causes of action,
demands, rights, damages, debts, sums of money, accounts, financial obligations,
suits, expenses, attorneys' fees and liabilities of whatever kind or nature in
law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, which Executive, individually or as a member of a class, now has,
owns or holds, or has at any time heretofore had, owned or held, against any
Released Party arising out of or in any way connected with Executive's
employment relationship with the Company, its subsidiaries, predecessors or
affiliated entities, or any event occurring or state of facts existing on or
before the date of this General Release, including, without limitation, any
claims for severance or vacation benefits, unpaid wages, salary or incentive
payment, breach of contract, wrongful discharge, impairment of economic
opportunity, intentional infliction of emotional harm or other tort, or
employment discrimination under any applicable federal, state or local statute,
provision, order or regulation excepting only those liabilities and obligations
that this General Release expressly creates or expressly provides which will
continue in force in accordance with this General Release.
Executive acknowledges and agrees no provision of this General Release
is to be construed in any way as an admission of any liability whatsoever by any
Released Party under any federal or state statute or the principles of common
law, any such liability having been expressly denied.
Executive acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date of execution of this
General Release, filed any complaints, charges or lawsuits against any of the
Released Parties with any governmental agency or any court or tribunal, and that
he will not do so at any time hereafter.
